Feature/OPED
The Options Before Nigeria
By Michael Owhoko
In the midst of sustained challenge for restructuring and other sundry agitations in Nigeria, there is iota of hope, if only the ruling class is prepared to do the needful, writes Michael Owhoko
Nigeria has been through quite a lot in recent times than at any other time in its political history, but at this very moment, aside the almost resolved security challenges facing Nigeria, issues relating to self-determination and restructuring are some of the burning issues that the government of the day is grappling to manage.
As it is, close observer will easily say the incumbent leadership of the federal government is not favourably disposed to restructuring, whereas, sentiments have easily been aroused by proponents and opponents of the restructuring debate. Unfortunately, while the civil society and geopolitical interests have been calling for some changes in the Nigerian constitution as a way to perfect and strengthen the union that constitutes Nigeria, the citizenry are not adequately motivated to fully join the clamour either because of lack of clear understanding of the issues at stake or are overwhelmed by economic concerns.
First, either for or against restructuring as currently being canvassed, it is obvious that the people of the South and the North are not on the same page. Nigerian must understand that as a multi-ethnic society with diverse cultural dissimilarities, the country qualifies as a sociologically complex society, posing a serious challenge to the country’s continued existence as one united nation. This makes it imperative as a matter of necessity to do the needful and embark on a constitutional amendment that will give birth to a restructured new Nigeria.
Secondly, in discussing issues relating to the Nigerian structure, which evidently, is defective, and the sustained clamour for a truly federal constitution, primordial sentiments must be avoided because as things stand, objectivity is being overwhelmed by emotions depending on who is looking at what issues and the side of the divide on which he or she is rooted. The overall consequence of this will be unhelpful to decision-making process, as emphasis may be on sectional rather than national interest, even at the highest level of governance.
In reality, the Northern Protectorate, which comprises mainly the Hausa-Fulani people and the Southern Protectorate, made up of the Yoruba, Igbo and the Niger Deltans, are initially district nations with separate cultural peculiarities before they were merged by the British colonial masters strictly for business and administrative purposes in the 1914 amalgamation.
Though the motive was not clear, but it is certainly not unconnected with achieving cost efficiency without passing the incidence of the cost of administration to the home country. This was so because the Northern Region was already experiencing budget deficit at the time when the Southern Protectorate had a robust budget with surplus.
From the onset, not many Nigerians were happy about the forced marriage. In fact, in one of his reactions to the Nigerian nationhood, the leader of the Northern People’s Congress (NPC), the Sardauna of Sokoto, late Sir Ahmadu Bella once said: “The mistake of 1914 has come to light and I shall like to go no further again.” Likewise, the leader of the Action Group (AG), late Chief Obafemi Awolowo also said: “Nigeria is not a nation. It is a mere geographical expression. There are no Nigerians in the same sense as there are English, Welsh, or French. The word Nigeria is a mere distinctive appellation to distinguish those who live within the boundaries of Nigeria and those who do not.
Chief Awolowo, in his book, The Peoples’ Republic, further confirmed the brittleness of the Nigerian state when he said, “It is incontestable that the British not only made Nigeria, but also hand it to us whole on their surrender of power. But the Nigeria, which they handed over to us, had in it the forces of its own disintegration. It is up to contemporary Nigerian leaders to neutralize these forces, preserve the Nigerian inheritance, and make all our people free, forward-looking and prosperous. “
The two men were apparently referring to the unhealthy amalgamation of 1914, and from then till now the Nigerian people themselves have not shown signs of willingness to unite, a confirmation that Nigeria is only a British intention and except other viable options are explored, the fragile peace in the country can still snowball into total disintegration because the country is surely on the precipice.
The most reliable option available to Nigeria is a federal system of government as practised in the country in the first republic from 1960 till 1966. I say this because the fear of Nigeria’s founding fathers has always been that the colonial masters failed to take into consideration the ethnic and cultural differences which ultimately shape peoples’ perception and decisions, hence as it is today, the allegiance of Nigeria’s founding fathers was to their respective regions, and by extension, current leadership, though surreptitiously.
Nigeria purportedly operates a federal system of government today, but the main defect is the absence of the features of that form of government, namely, autonomy of the federating units. This is conspicuously missing as evident from the dependency structure between the states and the centre. In a truly federal system, certain characteristics pertaining to the federating units are present, and some these include state-owned constitution, regional police, coat of arm, and so on.
This level of autonomy allows the units to adopt peculiar and independent style of administration to address their specific needs incidental to their culture, values and heritage. Then there is also something very vital that true federalism guarantees and that is fiscal federalism. This defines and provides the framework of financial relationship between the centre (federal government) and the rest of the states.
Chief among what proponents of restructuring are actually calling for and which are well enumerated in my book: Nigeria on the Precipice: Issues, Options and Solutions – Lessons for Emerging Heterogeneous Democratic Societies , is a constitution that promotes fiscal federalism under which each region is at liberty to generate its own resources and discharge its statutory responsibilities within the limit of its resources, while also maintaining its status as an autonomous state within the federation.
Truth is, researchers, analysts and well-meaning Nigerians have collectively agreed that the bane of Nigeria’s problem is the transition from federal system to the unitary system as perpetrated by the military during their illegal incursions into politics in 1966.
It was during that period that the principle of derivation, an element of fiscal federalism, which was designed to ensure equity by way of compensation to the area from where mineral resources are extracted, was abandoned, whereas, when cocoa, groundnut and oil palm were sources of revenue in the country, the principle of derivation was applied. This was why the western, northern and eastern regions benefited from 50 percent derivation as provided for by the 1963 constitution.
Now, the challenge is, the Nigerian economy is largely dependent on oil, hence it occupies a place of prominence in the country’s revenue matrix but unfortunately, the exploration of oil in the Niger Delta region has not only had very negative effects on the environment, but the abrogation of the derivation principle has stripped it of its due share of national revenue, making the people of the region to have less to show for the quantum of wealth being taken out of their land. The derivation principle is currently pegged at a minimum of 13 percent.
Currently, Nigeria is draped with unresolved national issues that are capable of relapsing into an albatross around its neck because these issues are also the forces pulling apart the people of the country. Every ethnic group and every section has one grievance or the other against the Nigerian state. As indicated in my book and in consonance with other opinionated Nigerians, the resentments are as a result of the flawed process that led to the emergence of Nigeria as a country.
The somewhat reluctance of government to address these challenges is exacerbating concomitant frustration in the country and this is slowly but gradually killing the spirit of patriotism with regrettable decline in commitment towards national unity without which there cannot be any meaningful progress. For instance, the Biafra agitation is nothing but one of the symptoms of discontent, so too the militancy in the Niger Delta Region is an indication of frustration in the Niger Delta.
The long and short of this article is that the Nigerian nation is not working, particularly due to the application of wrong solutions induced by insincerity and hypocrisy and as a result, the future of the country is bleak, and, this explains why the clamour for restructuring is gaining unprecedented dimension more than at any time in history.
There is no rocket science to it. The way for Nigeria to go is true federalism, which guarantees fiscal federalism, and implicitly, financial autonomy. This will ensure equity in the administration of revenue because the pattern of revenue sharing formula has remained a bone of contention between federal and state governments. In such circumstance, the principle of derivation serves as a mechanism against revenue injustice, but where true federalism fails to be accepted, confederalism becomes the other available option.
Also, the steady escalation of tension in the country can be doused if the ruling class can throw pride to the wind and chart the path of peace and honour in their approach to resolving the current challenges facing the country by conducting a referendum. Through a referendum, the people can actively participate in deciding which system of government to adopt. Referendum is a political instrument for resolving political questions. It is an aggregation of the wish of the people.
Nigeria has the potential to grow capacity for global relevance, but suppression of the wishes of the people is capable of frustrating this hope. So, let us concede ethic and sectional pride and allow the country to be repositioned through restructuring to enthrone justice and equity aimed at achieving peace, happiness and progress.
Michael Owhoko, author, Nigeria on The Precipice: Issues, Options and Solutions – Lessons for Emerging Heterogeneous Democratic Societies, wrote from Lagos.
By Blaise Udunze
Daily, the world watches Nigeria through a familiar lens in what appears to be a gory situation. Especially in cases when the news headlines tell stories of farmer-herder clashes, bandit attacks, kidnappings, villages reduced to ashes or deserted by the dwellers, as thousands of Nigerians have been displaced across states such as Zamfara, Plateau, Benue, Niger, Kaduna and Nasarawa. Subliminally, this is about to become a similarly ugly occurrence in southwestern Nigeria, which is fast becoming obvious if not nipped in the bud quickly.
Recorded data have shown that bandits, Boko Haram, and others killed over 190,000 Nigerians in 17 years and displaced 3.7 million people.
A human rights organisation, the International Society for Civil Liberties and Rule of Law (Intersociety), in its fearful revelation, has said that no fewer than 190,150 Nigerians have been killed by bandits, Boko Haram insurgents, and suspected armed herdsmen between July 2009 and March 19, 2026, as this calls for concern.
The dominant explanations often point to ethnic tensions, religious divisions, climate change, shrinking grazing routes or weak security institutions. No doubt, those factors are certainly part of Nigeria’s complex security crisis. Yet another question deserves serious examination.
What if, in some locations, the violence is also serving another purpose? What if some of the territories experiencing repeated displacement are the same places sitting atop some of Nigeria’s most valuable mineral deposits? More importantly, if such a pattern exists, who benefits when communities disappear?
Of a truth, these questions are uncomfortable, but undeniably they deserve careful investigation rather than dismissal.
For ages, Nigeria has been naturally endowed, and it is estimated to be rich in enormous significant reserves of gold, lithium, uranium, tin, columbite and other strategic minerals increasingly sought after in the global transition to clean energy technologies. As international demand for battery minerals continues to rise, these resources have become far more valuable than they were only a decade ago.
If one overlays publicly available geological information with maps showing persistent violence, some observers argue that striking geographical overlaps appear in several regions. Such overlaps alone cannot establish causation. Correlation is not proof of conspiracy. However, they raise questions worthy of independent scrutiny.
One issue attracting increasing attention and adequately yearns for answer is whether prolonged insecurity may inadvertently or deliberately create conditions that make mineral extraction easier.
Under Nigeria’s Nigerian Minerals and Mining Act 2007, mineral resources belong to the Federal Government, while mining rights are granted through licences and leases. Community engagement and land access are expected to form part of the licensing process, although implementation varies depending on circumstances. This raises an important policy question.
What happens when the communities expected to participate in those processes have already fled because of violence?
Displacement changes the dynamics of land ownership, consent and access. While no evidence automatically proves that attacks are orchestrated to facilitate mining, the sequence of violence followed by renewed commercial activity in some locations deserves closer examination by regulators, lawmakers and investigative journalists.
In conflict studies, researchers have long observed that wars often generate economic winners alongside humanitarian losers. Could elements of Nigeria’s insecurity also be producing economic beneficiaries?
Reports over the years have documented concerns about illegal mining operations across parts of northern Nigeria. Government agencies themselves have repeatedly acknowledged that criminal networks profit from the country’s vast mineral wealth. The unresolved question is whether isolated criminality has, in some instances, evolved into more sophisticated alliances involving political influence, financial interests and international supply chains. If so, the implications extend far beyond Nigeria.
Invariably, it is clearly known that lithium has become one of the world’s most strategic commodities, powering electric vehicle batteries and renewable energy storage systems. Gold has always remained one of the safest global investment assets during periods of uncertainty. Meanwhile, it is well confirmed that the global appetite for these minerals creates enormous financial incentives.
Suppose violent displacement reduces resistance to extraction. Suppose shell companies subsequently acquire mining interests. Suppose minerals then leave Nigeria through legitimate-looking export documentation while their true value remains understated.
These scenarios remain allegations unless supported by verifiable evidence. Yet they outline a framework that investigators may wish to test rather than ignore. Financial crime experts frequently identify trade mis-invoicing as one of the most common methods of illicit financial flows worldwide.
Could Nigeria’s solid minerals sector be vulnerable to similar practices? If valuable lithium ore is deliberately but inaccurately described as lower-value material on export documents, substantial wealth could potentially leave the country without reflecting its true market value. Likewise, if unrefined gold exits through privileged channels with limited scrutiny, questions naturally arise about oversight, transparency and accountability over criminal activities which have continued to stunt and disrupt the country’s socio-economic growth and at the same time cause carnage.
Such possibilities are not accusations against any particular institution or company. Rather, they illustrate why stronger monitoring systems are increasingly essential. Another question concerns logistics.
With the high level of criminal activities, industrial mining requires heavy machinery, diesel supplies, transportation networks and specialised personnel. These are not operations that can remain invisible indefinitely.
If certain territories are genuinely too dangerous for security agencies, how do industrial-scale extraction activities reportedly continue in some remote locations? If they do, who protects those operations? Who authorises their movement? Who verifies what is extracted? Who ensures royalties and export revenues reach public coffers? These are governance questions that demand institutional answers.
Equally important is the international dimension. Minerals extracted in Nigeria ultimately enter global supply chains. Gold may pass through international refining hubs before entering financial markets. Lithium may become part of battery manufacturing destined for electric vehicles, which are being sold across Europe, North America and Asia.
One known fact is that consumers purchasing products containing these minerals rarely know the full story of where they originated.
Increasingly, however, investors and governments are demanding ethical sourcing standards that trace minerals from extraction to final manufacture.
A critical factor that must be taken into cognisance is that if insecurity is creating opportunities for illegal or unethical extraction anywhere in the world, multinational companies have responsibilities alongside national governments, of which the onus falls on the Nigerian government.
Transparency cannot stop at the mine gate. Nor should accountability end at national borders. Another issue requiring attention concerns beneficial ownership.
Across many jurisdictions, shell companies can obscure the identities of individuals ultimately controlling commercial assets. If politically exposed persons or powerful business interests are hidden behind complex corporate structures registered offshore, identifying beneficiaries becomes significantly more difficult. This challenge is hardly unique to Nigeria.
Findings showed that from Latin America to Central Africa and Southeast Asia, resistant corporate networks have frequently complicated efforts to combat corruption and illicit resource extraction. That is precisely why open corporate registries, beneficial ownership databases and transparent mining licence disclosures are becoming global governance priorities. For Nigeria, the stakes could hardly be higher.
The country stands at the centre of the world’s emerging critical minerals economy. The Nigerian government can’t feign ignorance of the fact that, when handled transparently, these resources could finance infrastructure, education, healthcare, and industrial development for generations.
In no way would the government claim not knowing that when handled poorly, they risk becoming another chapter in the well-documented “resource curse,” where extraordinary natural wealth coincides with persistent poverty, insecurity and institutional weakness.
The ultimate challenge, therefore, is not simply about mining. It is about governance. It is about whether public institutions possess both the independence and capacity to ensure that natural resources benefit citizens rather than narrow interests. It is about whether conflict zones receive genuine peacebuilding efforts instead of becoming forgotten frontiers. And it is about whether international markets demand accountability with the same enthusiasm they demand raw materials.
None of these questions should be answered through speculation. They require rigorous investigations, forensic financial analysis, satellite imagery, mining license audits, customs records, beneficial ownership disclosures and courageous journalism.
They require governments willing to open their books. They require international cooperation capable of tracing money across borders. Most importantly, they require asking questions that have too often remained unasked.
Perhaps Nigeria’s security crisis is exactly what it appears to be: a tragic convergence of historical grievances, weak institutions, criminality and environmental pressures. Or perhaps, in some places, another layer of economic incentive deserves closer scrutiny.
Until those questions are thoroughly investigated, one possibility will continue to linger. Maybe the world’s attention has been fixed on the blood spilt above ground, while too little attention has been paid to the extraordinary wealth lying beneath it.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
Feature/OPED
What Does Nigeria’s $51bn Reserves Milestone Mean if Most New Foreign Money Can Leave Quickly?
Nigeria’s foreign reserves have climbed to about $51 billion, a decade-plus high, according to the Central Bank of Nigeria (CBN). EBC Financial Group (EBC) notes that this reflects stronger investor confidence, but the second half may show whether it holds, as the build rests on three cyclical drivers: oil earnings, short-term foreign money and a narrowing official-to-street naira gap.
Reserves rose from about $32 billion in April 2024, during a dollar shortage, to about $51 billion now, near the CBN’s target. Much came from two cyclical sources, strong oil earnings and money chasing high-yielding naira assets, so EBC expects the pace to slow or reverse. Fitch Ratings, a major international credit rating agency, expects a marginal decline to about $47 billion by the end of 2026, citing higher spending and external pressures.
David Precious, Senior Market Analyst at EBC Financial Group, said, “Nigeria’s reserve build is real but may not be durable yet, because nearly all of the new money is the kind that can leave quickly. Of the $10.37 billion that came in over the first quarter, the overwhelming majority was short-term portfolio funds rather than long-term investment, so a shift in oil prices, global interest rates or confidence in the naira might pull a large part of it straight back out.”
Most New Money Can Still Leave Quickly
The composition of the foreign inflows explains the caution over how long the build can last. The country attracted $10.37 billion in foreign investment in the first quarter of 2026, up 83.83 per cent year-on-year, according to the National Bureau of Statistics (NBS). Of that, $9.86 billion or 95.09 per cent, was portfolio money, largely short-term naira debt such as Treasury bills that investors can sell at the next auction, while foreign direct investment, the long-term kind that builds factories and jobs, was $135.08 million, or 1.30 per cent. Put simply, of each dollar coming in, about 95 cents can leave quickly, and barely one cent stays.
That money supports reserves while it stays. Dollars brought in to buy naira assets add to market supply, letting the CBN hold more reserves and steady the naira. It leaves when conditions change. Nigeria earns most of its export dollars from oil and gas, so lower oil prices mean fewer dollars, and as a member of the Organisation of the Petroleum Exporting Countries (OPEC), it cannot simply produce more, output capped by quota and reduced by theft and ageing fields. Higher global interest rates draw money toward safer returns abroad, and a weakening naira prompts investors to sell early. When oil fell in 2016 and 2020, foreign investors withdrew and could not convert naira to dollars as supply dried up, leaving the CBN to clear more than $7 billion in trapped obligations into 2024.
The Oil Boost is No Longer Certain
Oil looked like a dependable source of the dollars behind the reserves only months ago. Earlier in 2026, concern over disruption around the Strait of Hormuz lifted crude prices, and stronger receipts flowed in, with crude oil export earnings of $8.11 billion in the first quarter in the CBN’s balance-of-payments data. That support is now easing. The tension has subsided, and Brent traded near $72 on June 29, down about 24 per cent over the month, back to pre-conflict levels. With the price boost gone and output constrained, reserves are more exposed, leaning on non-oil earnings and investor patience rather than oil.
The Naira Still Trades at Two Prices
The naira has traded at two prices, an official rate and a higher parallel-market rate, and closing that gap into one trusted price is what many investors might watch most. Before committing funds, they may want assurance they can convert naira to dollars at a fair rate when they exit, and a wide gap revives the fear of being trapped that lingers from earlier shortages. The gap has narrowed to roughly N20 to N30, with the CBN’s official rate near N1,380 per dollar on June 26 against parallel-market quotes around N1,400. The International Monetary Fund (IMF) 2026 Article IV review urged Nigeria to depend less on this fast-moving portfolio money and to keep phasing out its multiple exchange-rate practices. The CBN’s Foreign Exchange Manual, in force from 1 June, is intended to make the market clearer, though such rules build confidence only once investors can freely trade dollars at the posted rate.
What could Make the Build Durable
A few signs that may show the build turning durable include a smaller gap between the official and street naira rates, more long-term foreign investment, and steadier oil earnings. A gap that stays small, now roughly N20 to N30, may mean investors trust the official rate and no longer need the street market. A clear rise in foreign direct investment, only $135 million last quarter against $9.86 billion of short-term money, might mean lasting capital is replacing funds that can leave at the next auction. Oil earnings that hold up, rather than sliding from the low $70s, should help keep reserves steady, since oil and gas bring in most of Nigeria’s export dollars.
“Reserves built on money chasing high yields can fall as fast as they rose, as they did after the last two oil shocks, when investors left, and the CBN spent years clearing a foreign-exchange backlog,” Precious added. “What holds through a downturn is slower money, direct investment, steady oil and non-oil export earnings and one credible naira rate, and that is the shift Nigeria has yet to make.”
By Olajumoke Bello
Across Nigeria, small and medium enterprises remain the backbone of economic activity. They drive trade, create jobs, and sustain millions of livelihoods. Yet, despite their importance, many SMEs continue to operate below their full potential due to persistent structural challenges.
Access to finance remains one of the most cited constraints. However, the issue today goes beyond the availability of capital. Many businesses struggle with financial readiness, weak documentation, and limited understanding of what lenders require. This often leads to missed opportunities, even when funding options exist.
At the same time, SMEs face gaps in market access and visibility. Business owners operate in highly localised environments, with limited exposure to broader networks that can unlock partnerships, new markets, and growth opportunities. This isolation can constrain scalability and reduce long-term competitiveness.
Equally important is the capability gap. Many entrepreneurs grow through resilience and experience but lack structured knowledge on critical areas such as financial management, export readiness, and digital adoption. Without this, even well-capitalised businesses can struggle to sustain growth.
These challenges point to a clear need for a more practical and integrated approach to SME support. It is no longer sufficient to offer standalone solutions. SMEs require ecosystems that combine knowledge, access, and direct engagement in ways that reflect how they actually operate.
A key shift is the move from centralised interventions to localised engagement. SMEs are deeply influenced by their immediate environments, whether markets, industrial clusters, or trade corridors. Solutions must therefore be brought closer to where these businesses function, allowing for more relevant support and stronger relationships.
Another important shift is from awareness to action. Business owners do not only need information; they need insights that they can apply immediately. This includes understanding how to structure their finances, how to access trade opportunities, and how to connect with the right partners to scale their operations.
There is also a growing need for continuity. Many SME-focused initiatives deliver strong initial impact but lack follow-through. For support to be effective, it must extend beyond one-off engagements into sustained relationships, with clear pathways for onboarding, advisory, and growth.
For financial institutions, this presents both responsibility and an opportunity. Supporting SMEs now requires moving beyond transactional banking to deeper partnership models. It requires understanding businesses at a granular level and co-creating solutions that evolve with their needs.
At Stanbic IBTC, this perspective continues to shape our approach to SME development. Our focus is on delivering practical support that translates into real business outcomes, helping enterprises grow, compete, and contribute more meaningfully to the economy.
As part of this commitment, we are extending our SME engagement to the regions through the Nigeria Business Summit Regional Tour. The tour will take structured, on-ground activations into key commercial hubs, where SMEs can access funding guidance, trade insights, advisory support, and direct engagement with financial experts.
The regional tour will take place across five strategic locations, bringing these solutions closer to business owners in Aba, Onitsha, Ibadan and Kano.
This approach reflects an important principle. When support moves closer to businesses and when solutions are delivered in ways that are practical and continuous, SMEs are better positioned to grow sustainably. In turn, this strengthens not only individual enterprises but the broader economy.
Olajumoke Bello is the Head of Enterprise Banking at Stanbic IBTC Bank
